Thursday, March 14, 2013
Posted by D. Daniel Sokol
Justus Haucap and Ulrich Heimeshoff (Dusseldorf Institute for Competition Economics, Heinrich-Heine-University of Dusseldorf) ask Google, Facebook, Amazon, eBay: Is the internet driving competition or market monopolization?
ABSTRACT: This paper discusses the general characteristics of online markets from a competition theory perspective and the implications for competition policy. Three important Internet markets are analyzed in more detail: search engines, online auction platforms, and social networks. Given the high level of market concentration and the development of competition over time, we use our theoretical insights to examine whether leading Internet platforms have non-temporary market power. Based on this analysis we answer the question whether any specific market regulation beyond general competition law rules is warranted in these three online markets.